closeup of a payroll tax withdrawal

(Credit: tattywelshie / Getty Images)

A bipartisan bill restoring a tax credit for small business and nonprofits — including senior living — is a “lifeline” to keep employees on the payroll during the COVID-19 pandemic, according to supporters.

Argentum joined with 70 other trade associations and nonprofits — which sent a letter to President Biden and congressional leadership last month asking for the tax credit to be restored — in applauding the introduction of the Employee Retention Tax Credit Reinstatement Act. The ERTC, which was terminated at the end of the third quarter of 2021, helped cover costs for employers who experienced revenue drops and kept workers on the payroll. 

The credit originally was enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, expanded in December 2020, and extended as part of the American Rescue Plan Act in March 2021 to run through the end of 2021. But the credit was included as a pay-for in the bipartisan Infrastructure Investment and Jobs Act enacted in November, which retroactively ended the credit early, on Sept. 30.

Employers who took the credit into the fourth quarter face a tax increase and forfeiture of those dollars. The reinstatement would enable businesses who kept workers on payroll in the fourth quarter of 2021 to claim the credit.

The ERTC is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages that an eligible employer paid to employees after March 12, 2020, and before Jan. 1, 2021. It provides up to a potential $26,000 credit per employee. 

Argentum President and CEO James Balda said the tax credit restores a lifeline to senior living and “ensures that providers can continue to focus on delivering quality care to those that need it most.”

“Senior living providers have been working tirelessly to care for our nation’s most vulnerable seniors while supporting their hero caregivers serving on the frontlines of this pandemic,” Balda said. “The Employee Retention Tax Credit had been an essential tool for these providers to meet their enormous financial and workforce challenges, but was unfortunately and prematurely ended.”

The bill, Balda said, ensures that eligible senior living providers do not face “unanticipated, crippling tax burdens, particularly with compounding financial and workforce challenges.”

The act — introduced by Sens. Ben Cardin (D-MD), Maggie Hassan (D-NH), Shelley Moore Capito (R-WV), Tim Scott (R-SC) and Mark Warner (D-VA) — is a companion to HR 6161,  introduced in December by Reps. Kevin Hern (R-OK), Carol Miller (R-WV), Stephanie Murphy (D-FL) and Terri Sewell (D-AL).